Trump presidency a threat to world economy, says risk report

1. China experiences a hard economic landing

"If China's economy slows by more than we currently expect, it will further feed the ongoing global commodity price slump (especially in oil and, in particular, metals), with a hugely detrimental impact on those Latin American, Middle Eastern and Sub-Saharan African states that had benefited from the earlier Chinese-driven boom in commodity prices," the EIU writes. "In addition, given the growing dependence of Western manufacturers and retailers on demand in China and other emerging markets, a prolonged deceleration in growth there would have a severe knock-on effect across the EU and the U.S. — far more than would have been the case in earlier decades."

2. (Tie) A new cold war prompted by Russia's interventions in Ukraine and Syria

According to the report, "the stepped up deployment of NATO forces to Eastern Europe (including the Baltics), as well as Russia's provocative tendency to fly its military aircraft over western European airspace, raise the risk of a direct confrontation. With this in mind, Western countries will begin to reverse their defense cuts of recent years, complicating efforts to rein in high fiscal deficits, and the continued uptick in tensions could also see a return of the political risk premium in oil prices."

2. (Tie) An emerging markets corporate debt crisis

"Any rolling emerging-market debt crisis would cause considerable panic across the global capital markets, and may require governments in several economies to step in to shield their banks from the fallout — risking a repeat of the banking crises witnessed in Europe at the start of this decade," the report says.

4. (Tie) A fracturing of the European Union

"In the event that the EU began to fracture and land borders reimposed, trade flows and economic co-operation would be hindered, harming growth in the world's largest single trading bloc — and notably in trade-reliant Germany, which shares land borders with 10 fellow Schengen members — and leaving the fragile euro zone states more vulnerable in the event of another economic downturn," the EIU says.

4. (Tie) A break-up of the euro zone after an exit from it by Greece

Countries leaving the euro zone while "under duress would suffer large devaluations and be unable to service euro-denominated debts. In turn, banks would suffer huge losses in their sovereign bond portfolios, resulting in major disruption to the global financial system and plunging the world economy into recession," the report says.

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